Our guest on the 2nd of March, 2020, on the sellerboard show was Luke Dugan, an experienced Amazon FBA Seller and Coach.
We talked about:
- Selling used products on Amazon FBA
- Retail Arbitrage on Amazon
- How to start a wholesale business on Amazon in the UK
Watch full video here: https://www.youtube.com/watch?v=np97K3zvSz4
[00:00:07] Hello, everybody, and welcome to The sellerboard Show. My name is Vladi Gordon. And in this episode, I’m joined by Luke Dugan from MR FBA UK, an Amazon seller.
[00:00:18] He’s doing it full time since a couple of years, started actually by selling second hand stuff on Amazon.
[00:00:25] This I find very interesting because we’ve never had anybody talk about selling second hand through FBA. And then he moved into retail arbitrage on an arbitrage, knowing starting his wholesale business in the UK on Amazon. So we’re going to talk about all those models and how they work specifically in the United Kingdom. I know some of you guys are familiar with those in the US and now we’ll just kind of compare them and get perspective on the UK. And I think that’s a very interesting market. So this was very interesting for me. I hope you’ll find this to be useful as well.
[00:01:05] Please press the like button if you find this content useful and subscribe to our channels, we’re inviting experts on Amazon FBA and trying to bring you useful content.
[00:01:20] Every couple of weeks on this channel.
[00:01:23] Before we start, I would like to talk quickly about ourselves. sellerboard, come where profitability serves for Amazon FBA sellers. We have a free trial, one free one month trial. Please follow the link in the description. After that, it’s only nineteen dollars. And our vision is to provide the basically the most accurate financial analytics, most easy to use interface and packed with the absolutely insane amount of features and additional modules for $19.
[00:01:57] So check out our product link in the description. There’s a free demo account which you can view without actually registering and just click the demo button and you’ll immediately see our demo account populated with the stamp products.
[00:02:13] So now let’s start the show.
[00:02:28] Hello, everybody, and welcome to the sellerboard show. My name is Vladi Gordon. And in this episode, I’m joined by Luke Dugan from MR FBA UK, an Amazon seller.
[00:02:39] He’s doing it full time since a couple of years. And he started actually by selling second hand stuff on Amazon.
[00:02:46] And this I find very interesting because we’ve never had anybody talk about selling second hand through FBA. And then he moved into retail arbitrage on an arbitrage, knowing starting its wholesale business in the U.K. on Amazon. So we’re going to talk about all those models and how they work specifically in the United Kingdom. I know some of you guys are familiar with those in the US and we’ll just kind of compare them and get perspective on the U.K. and I think that’s a very interesting market. So this was very interesting for me. I hope you’ll find this to be useful as well.
[00:03:27] Please press the like button if you find this content useful and subscribe to our channels.
[00:03:32] We’re inviting experts on Amazon FBA and trying to bring you useful content. Every couple of weeks on this channel. Before we start, I would like to talk quickly about ourselves.
[00:03:48] sellerboard, come where profitability take service for Amazon FBA sellers. We have a free trial one free one month trial. Please follow the link in the description of the that it’s only nineteen dollars and our vision is to provide the basically the most accurate financial analytics and the most easy to use interface and packed with the absolutely insane amount of features and additional modules for $19.
[00:04:18] So check out our product link in the description. There’s a free demo account which you can view without actually registering and just click the demo button and you’ll immediately see our demo account populated with demo products.
[00:04:34] So now let’s start the show.
[00:04:42] Hey, Luke, thanks for joining us. How are you? Yeah, great, thanks. Yeah, thanks for having me. Thanks. So tell us, how did you end up in this Amazon universe? Whatever you’ve been doing before.
[00:04:58] I was going to ask you from when I was maybe like fifteen, sixteen, I was playing around with online websites and like affiliate side of things and sold, say, selling. But it was all just off my own sort of instincts and not really any knowledge or understanding of anything that was going on. And I sort of try things over the years or I’ll research a lot because I really wanted to. I did business at university base and I wanted to figure out a way to go into it for myself. But I didn’t want to just force some that I just just to start my own business. I didn’t want to force anything. So I still got a job like most people do. Many in the finance area, just whatever self came up did that for maybe four or five years. But I always knew that was. I want to do something online if I could. And over the year to sort of research things, look to not look. You know, I knew you could sell on Amazon at that point, so I didn’t really understand it. And then slowly but surely, I looked to private label. And then I this is almost over on YouTube.
[00:06:04] So people that were already doing it and then I looked at sort of reselling on YouTube and just kept watching. I was now is it videos? Then I was like, right, I’m going to get the basics of Star and just started it part time, maybe selling second hand products on Amazon. Did you find the right items as a lot of demand? So a lot of older things that maybe not necessarily been to do such, but just older things that people wanna go back to, maybe like old consoles or games. I like it. So Super Mario and that sort of thing. And then slowly progressed to actually reselling obviously new products when wholesale and all that sort of area. And now I do it full time. I’ve been doing that for years now. Owens That’s sort of like, you know, that’s that’s sort of my core business. But I do a lot of other areas which may be like coaching, helping people get into the area and sort of giving guidance. And, you know, videos on YouTube channel how to even go about starting your own reselling business on Amazon.
[00:07:11] Very cool. So the fundis sounds interesting. I have a lot of questions about every every single step, but one question before that. So you’re mainly focused on Amazon UK, right?
[00:07:26] Or are you’re so lazy? I do sell in Europe because as you know, there’s there’s been a lot of of changes around the whole Brexit side of things because obviously we’re the UK. Why don’t you pan European, which is where you stole your stock in that countries. I just do it. In European Film Network, I’m so. The core of the business is the UK and I may do maybe 5 to 8 percent of my sales in Europe, maybe up to 10 maybe at Christmas time, but the majority of it is is the UK.
[00:07:59] Okay, that sounds cool. Look, you mentioned second hand. I actually never talked to anybody else selling second pencil. Tell us more about this. How does this even work? Can I can. You can obviously sell second hand on Amazon, right. But that’s not so obvious to most people, I believe.
[00:08:18] Yeah. I mean, it’s more maybe on new products like day to day products. There’s not really gonna be anything, you know, if you’re buying a laptop or something because most the time that people on brand you and a lot people don’t really go about selling that sort of thing. But I started off selling was going once, you know, like something like Facebook Marketplace looking for things I knew about, which was like video games and that sort of thing from my childhood. So I sort of knew what they were. What was the best best of the bunch? Analyst I was almost putting a massive list of places to collect and I was going and doing a big day’s worth of like different stops, collecting lots of second hand goods that I you know, I put a bit in the one was sort of worth I would compare on Amazon what I could, you know, what I can make in terms of profit compared to the ones I was buying. And as long as that was making me some money, I would collect them from the house and normally come and collect it, destroyed them, maybe even a day trip, collect it up, list them all on Amazon a second hand and do it that way.
[00:09:19] Because if you actually look sort of older products, maybe like Super Mario, some of the intended D.S. or the Nintendo 3DS, which are slightly older versions, obviously the switches as well. And there’s a lot of second hand games that you can pick up. You know, you can sell for much cheaper than brand new. And a lot people don’t mind because it’s still the game. You know, it’s not going to change anything in terms of that. Like you can buy it for a couple of quid’s, sell it for, you know, ten, twelve quid. But actually browny maybe 20 for 99 pounds. So and you’re able to make some decent money but then you know it’s not massively scalable because you are, it’s a lot of time commitment involved. So over would over the years the months of sort of transition through to the more online side of things. Well I’m working from home.
[00:10:10] Okay. So you’re not doing it anymore at all right.
[00:10:15] No I’m not. But I do know that we’re all successful, like bookseller’s, and they’ve been doing it many years. I went to an event not long ago of an online arbitrage summit UK. This game organised it and there was a speaker. He sold used books. And that’s where we believe sell. And the fast sellers, you would sense WBA and A of sellers he would just too much and he would tell a lot of a shelf at the time. And it wouldn’t he could actually make, you know, thousands of dissent or y return on these products. Because he built up a good knowledge of what books he could pick up from charity shops is what he made. He did. And then we’d put on Amazon.
[00:10:55] So tell me, how does this second pen thing work when Amazon is it just like the new products? But you need to take the less second hand. Was there anything else? Is it pretty much.
[00:11:12] You it mainly selects as new, I believe, when you go to. So what you do is you’re piggybacking on the listings that are already that more than creating a listing. Most of those items that already exist. And then you will select used or used. So the different options is like I’m like, can you good average? I think I haven’t looked for a long time, but, you know, you select Sissel quality and then you select the price and you can select, you know, usually reprises to reprice these sort of things. But you are able to really is not always a lot of competition because people don’t necessarily. Well, that isn’t the first thing a lot people go to. And because of the quality as well. You can get almost like new products. You have to sell it for half the price of a new year. And that’s where I sort of.
[00:12:04] Yeah. What about like the shipping? Did. Did you mostly ship them through FBA or does it even work? Like.
[00:12:10] Yeah. So everything I used to do was FBA. I tried merchant fullfilled on a handful of products just to see, but everything could be done exactly the same as you would do it. You would just say on the on the barcode label that you put on it, just say use instead of me. Okay. Everything else is exactly the same.
[00:12:30] Okay. Interesting. And I feel the fees are exactly the same, right?
[00:12:35] Yeah. I cut them off to I had now a few years back. Bottoms. I do remember the referral fees that were all my suits I think was some some of the items. It was half. I think that was more for the category than it was the that because it was actually it wasn’t.
[00:12:51] Okay. Very interesting. But like I mean it would be I guess a very scalable idea if you find a way to source these items online, like on eBay or something like this.
[00:13:02] Yeah, sure. Are always there are you know, there must be like anything you pick mine to, you can find a way to do it. And there are people that were looking like you could ship. You can get people to ship. You can probably scale it because you could you could then move on to something eBay and get a second chance of a debate where it’s likely more expensive. But if you were doing volume, it’s like anything doable in a holding cell, bringing your down a little. And you could you could scan it.
[00:13:35] Ok, so let’s move on. And then you moved on basically to reselling and what kind of reselling is like online arbitrage or retail arbitrage or.
[00:13:43] Yeah. Yeah. So it’s on the second hand. I then moved to retail arbitrage and it seemed to be how this done the transition. And I got really into it. You know, I sort of like anything. You got good knowledge base, how it works, how to do it, where to go and even do trips. You know, you can go away for a couple of nights and used to just drive into a big right, which is quite fun as well. You know, it gets you out of the house and stuff. And over the you know, over the years, because obviously the capital built up is only same again with one person. There’s only so much you can buy in a day, almost. You know, it’s very difficult to spend two, three, four thousand pounds or even 10. When it comes to Q4, I could be spending 20 and 30 and I saw numbers. It really work with retail. I would charge. But the profits are higher. So, you know, it depends on what your goals are as such. You just do it part time. They don’t that do it. They might less than a week do on weekends. And that’s that’s great. And the people that want to do it full time and and push on from there have moved away from Amazon later. When we move into private label, the really like people would love to go on an albatross, like just literally buying online somewhere. And you make the margin in between where you sit on Amazon.
[00:15:05] Yeah. OK. A couple of questions about retail.
[00:15:08] So for those who don’t know what this is, this is basically buying goods off line at a discount, maybe at the local store and then sending them to Amazon to sell them through FBA. And then you need a sort of a process how to find a good deal. So there’s actually there’s an app. Amazon provides an app which you can use this kind of product. And it will tell you what’s the retail price on Amazon. And then it can kind of see if it’s worth to buy it. But one question that we get very often this invoices. So sometimes the Amazon, depending on what you’re selling and for selling its products, it might or might need to show them an invoice just to prove that it’s an authentic product. So did you have such requests from Amazon or did you?
[00:15:55] I never had that before. I die. You know, I have a Facebook and a lot of people do post questions, even if they’re just curious. And it is quite important to keep sort of a very professional receipt management almost. You can be very vigilant in that sense. It’s very easy to lose your receipts. Definitely buying it from a store. But you can. A lot of the time. I know many people that have used the receipts from, say, Tesco’s or you supermarkets. And that has been fine. But like Amazon, you know, with anything you do find, there are instances that people in one scenario provide something and that someone would do exactly the same in another scenario. And it doesn’t always pan out the same. But, you know, it’s just it is the same as online arbitrage and that sort of sense. But as you move towards that way, you are able to get more professional invoices because you were able to get it off sort of the head office. Right. I think a lot of the free time receipts, you have to go to that specific store, you want to get a cut of the 80 invoice and that sort of thing. So it’s a lot more time intensive. Yeah.
[00:17:06] But in general, like if you if you shop offline in the U.K., you get the invoice in the store, you’ll get the receipt.
[00:17:12] But you can you can go and request, OK. You basically go to the customer services. What you looking for?
[00:17:19] I can give them your company address and the end and they be able to little governance and take that receipt. And they’re basically left fresh.
[00:17:27] Ok, I got it. All right. And let me move to all and arbitrages. So so how does this work? Basically sourcing goods online and selling the Amazon through FBA.
[00:17:37] So they’ll no.but like help. How does this work in the U.K.? So what’s the process?
[00:17:43] Yes. So in a sense, there’s many so there’s no exact way to do it. But, you know, roughly, it will be you will go and find. So there’s a like sourcing softwares and services that describes it. We can just do manual paste. Just go to one Web site. Buying a product. Maybe it’s on sale. Maybe it’s 50 percent. Also at Christmas, you could spend Christmas Eve in court or get off good office in sales on your find some products. You then compare it to Amazon. And usually Amazon aren’t selling the products because usually that products are very competitively priced. So you’ll you’ll also stay clear of that. Find the products section more. So general third party sellers. And there’s lots of crime extensions you can use to figure out your profits and your margins and just going through the different items that there are and finding which ones are worth basically buying. Get them delivered, delivered to your house. If you are from Hymel, you can use a third party prep center. Whenever I see the label it for you and send it in on your behalf. You’ll send it into FBI and you’ll then most the time they set their prices depending on how much they bought it for and sell it.
[00:18:57] Ok, so we we’ve talked to some guys from doing that in the US. What first question about your case is like, does this business model make sense?
[00:19:09] Is there other. Are you able to find products or forks, as we call them, riskless products with height difference between the price off of Amazon on Amazon?
[00:19:21] Sure. I mean, I do know that with the U.S., it’s it can be a lot harder in terms of the marketplace. So they clamp down a lot harder. So you may be gated or branded in categories, but, you know, in your case with eBay’s, you’re in that sense because be able to sell in and fix up what this product or that sort of thing or like. But if you are able to sell Lego or Disney without any yet for me, I could I can sell pretty much everything. There are the odd item I come across now and then, but it is harder than you would Benue. Your account is the hard but more gated. You are not. But it does get on gated over time, so it’s a lot slower now than it used to be. But if you’re looking at you know, if you’re not looking just to make money quick in three months and then disappear, you know, looking a year and moving on that way, then you’re able to either get auto and gated, which is just you push through the volume and the sales will get out to one gated or you can get on gated through wholesalers with them, you know, like minimum 10 quantities of this. And that ought to get on gated that way. So what was the question when we just took him out?
[00:20:29] Just I guess it does this does this business model make sense? Like are you able to finally. Yes.
[00:20:36] To find enough arbitrage possibilities in India?
[00:20:41] I feel there is plenty, because no matter what the situation is now, you can always work outside the box and, you know, find to what others are doing, maybe not do that. We’ll do half of what they’re doing, because if too many people do the same thing, it usually would mean up there is not profitable products because it is going the same route and everyone’s competing, then no one makes any money because they will undercutting. You’re looking to make a sale. So while I know weeks of create nice hybrid between some sourcing software as well on print, I’m giving 10 deals a day where I’m able to maybe buy a couple of those every day or 10 a week or 10 a month. And then I’m able to complement that with like replenish supply side of things which may be more in groceries or bundles, racks a six of one items that just one item. Q Would most of the time you bundle of them up when you have a low FBA fee, it’s only one item shipped, but it’s actually six items and so you able to make some decent margins that way. I think there are many different ways. If you just really so strict back and look to make decent money and there’s always deals out there, it’s just looking and trying to just build on your knowledge and looking for all the new ways that you can do it.
[00:22:01] Can you give us an example for somebody who wants to start all over trash in the UK? Maybe just one example of a site, which would be like potentially interesting for sourcing.
[00:22:13] Yeah. Oh, Sam. You know, there’s so there’s two main ways you can go about doing it. There’s sourcing software as well, which allow automated programs which, you know, on like SBA with little technical arbitrage where you type in what you’re looking for a. The minimum or why to profits and also numbers. And you want to scan it and it compares Amazon and compares the stores. Yeah, and it twice a fine match isn’t then you can go and do your analysis.
[00:22:46] Do you need to specify a category there or maybe even give it the list of products or doesn’t do it?
[00:22:53] It can be as in-depth as you want in terms of your critique. Or it can be as broad as you want. And it could be a search 10 websites and you don’t you can type in your all wise or anything you just see. Then there are sourcing services where they give you online arbitrage deals, Pottruck SBA where they give you 10 deals a day or you can you can use like coupons or tokens to unlock deals that you can’t see what the product is sometimes, but you can then see the profits. I do it that way. And they’re both pros and cons. Both. Well, you might not be able to sell some of the products that you’ve given. If you’re newar, if it’s sold through the service side because you are given 10 to 15 products a day and you might have be out, sell them all again. They will actually be perfect hits. They will be legitimate purchases and sales will bounce on the software side. You can’t get a lot of mismatches because it’s only sacred as the point isn’t.
[00:23:52] And like, how are they finding 10 deals a day? They basically use the same software and then refine it manually. Or do you have an idea of the same thing?
[00:24:02] Yeah. I mean, most. I’m sure they have access to these. And in the past I believe they would have used these soft services. But the way that I understand it now is most of the time they have a team of virtual assistants which are based mainly in the Philippines. And they because their time compared to Europe is sort of the previous evening. So now be like eight o’clock at night until 9:00 at night in the morning now. And so while we’re sleeping there, go away and source products or find the products. MAN 3 Copy and paste all techniques. They go up and then they will go through to maybe a CBA. Will then check the deals to make sure they meet certain criteria and then maybe present it on the on the sheet as one of the 10 or one of the 15 or however many. Very, very cool.
[00:24:59] We know like some guys sourcing or Wal-Mart in the US, but can you name maybe a couple of big online shops in the UK where where you can typically for such things?
[00:25:12] I mean, is that that. Yeah, sure, yeah. There aren’t quite generic or well-known companies or websites. It could be anything from the entertainer of the Early Learning Center, Tesco’s Sainsbury’s, Asda Ocado. OK, cool. Yeah. But then there are others which are sometimes based in Europe. And I think a z one tweeze or something similar to that they had. You know, sometimes personally I don’t saucepan these so I couldn’t write second tier websites because I I only stick to sort of the well-known companies. I’ve got a slightly online because you never know. I like with them like religion. So based on fake products, quite like a big thing on Amazon and is clamping down and I want to have as the almost perfect invoice if they ask for course. All right. Run down some website that no one’s ever heard of. You can buy in. A lot of them will be fine. I don’t personally go to these. Yeah.
[00:26:16] Ok. And what about the invoices? Like all those shops you named the big the big shops. Will they give you an invoice?
[00:26:22] Yeah, sure. So you will find that there are times that they because they expects you to be a normal customer. Well, you know, just a retail customer. They do. Quick question what you will actually after. But if you bought it legally, they have to provide you the invoice unless it’s all on sun value. But this is mobile counts and cheap stuff. And I’ve not had any problems. And what I do normally every week or every month all go through my purchase log where I’ve got the order number and all that sort of thing. And all of that sends the customer services to each company. You know, commercial invoices usually will cool it and they will send it through within maybe a week. The question invoices that you apply not to me, not like I remember had any issues because as far as I know, they have to find it.
[00:27:14] Ok. So I think this is a difference to the US, because if you buy in Wal-Mart, in the US, for example, they’ve they not they won’t provide an invoice by default. But then the UK actually in the rest of Europe as well, they must provide a B 18 voice. And if you’re buying something, you can provide your your address. Right. You can just type in your company name there. So you will automatically kind of get an invoice, by the way, in Germany. I would say like ninety nine point nine percent of online shops send you the invoice. OK. So. So when you’re chicken after just typing in your shipping address and your invoice address and then you’ll get invoice by mail or it will be in the package. So, yeah, that’s that’s kind of automated. OK. OK, cool. And and in your experience, is that those invoices, normally, unless you buy from some very small shops that are not known or so that those invoices are really accepted because like if you buying at a retail store, I don’t know. It wasn’t. It probably doesn’t want sellers to source in retail stores. Right. Once you do.
[00:28:25] Yeah. Yeah. Right. Exactly. So it’s it’s it’s there’s no exact science to it. Some you know at most the time 99 percent the time all about kind of masc it very difficult to give my opinion but I can only go what I’ve seen from others are doing just one thing. There’s not even with the retail seat receipts from Tesco saying that this all the big name ones that I mentioned, there’s been no problems with the actually invoices. Let me know when I actually look at the detail on the site that will state your business name. It might be from the Disney store. Well, I’m sure it would be a Disney put out, and there’s no reason why that wouldn’t be accepted, because it will be almost exactly how it would be if you were buying from them directly.
[00:29:07] Yes. OK, very cool. All right. So eventually move to wholesale, though, or you’re still going away.
[00:29:17] I’m guessing wife’s off foot in the door on that side of things, because that is if you’re all looking to build what you have, two options. A lot of people will get to the online arbitrage side, build up the capital, and then they will go either to private label or usually to wholesale all their hybrid wholesale. With that on my top choice, because you can’t always get the spread of Warlock’s. So it’s more bombs. OK. I’m gonna go the wholesale route and the reason I haven’t done it over the years is because I’ve not needed to. But it is if you’re not looking to just to do it as a short term mortgage short. Business model. That is the my ultimate, safest and scalable side of things, because once you’ve got the capital, the able to make the bigger purchases on your orders. Margins are higher because you’re buying it cheaper. But you’ve got to have a decent chunk to be out by multiple lines. And at the moment, I’m not needed to because I’ve been able to find so many deals as I am. It’s like any market. Things change. A lot of companies in the UK have been closing down the last company that used to be great for an arbitrage. And they let you go into administration. So as the year progresses, you have to be very progressive as well. Any other way that you’re going about it and not just stick to what you do.